Delhi-based entrepreneurs can appear aggressive, but Harkirat Singh is a pleasant change. The third-generation owner of Aero Club, a more-than-two-decade-old company, and promoter of Woodland, is conservative, soft-spoken and most importantly, successful. An apparel-to-shoes brand, Woodland now owns one of the largest retail networks in India and has even ousted well-known foreign players from the country. Excerpts:
Q. Woodland’s journey as a brand has been very different from others. You’ve kept the company private and continued to invest and grow. How has it been so far?
We started out as an export firm as we had traditional expertise in leather goods. We launched in India because our core market, Russia, was shrinking. We realised that while there were several good quality manufacturers in the leather industry, none of them had a strong presence or [their own] brand. All of them were suppliers to global brands, and they still are. We wanted to be different. We launched our flagship product, a boat shoe for Rs 999, in the early ’90s. It was an expensive product then and niche too. We realised that we needed our own stores if we wanted to preserve the pricing and create an ambience for the brand. This was our first inflection point. We started building company-owned stores across the country. With the stores came the learning that we needed apparels too, and that was the second inflection point in ’98-99. By the time malls came up in metros, we had already built a successful retail format and were among the first customers [clients] of these malls.
It is not as if it has been smooth sailing: We have opened stores in some cities and also shut in some as we realised that the market was not ready or our product did not suit that market. But we have understood that there is a market for good quality and value-for-money brands that cater to the youth.
Q. What are Woodland’s core brand values?
The products that we make do not have much competition. We have imitators but no single competition. We have created a [product] look meant for adventure and outdoors, and that combines with khaki and oily leather in a unique design. We understand the youth and we are a brand connected to our customers. We change our product lines at least four times a year.
We started with tanneries and now own the whole production process which gives us a strong control over prices and quality. Most global manufacturers own only brands or retail storefronts.
Q. The youth has fast got on to e-shopping. How does that affect you?
We have had our own online store for a long time and we also sell through other marketplaces. Online does create dissonance with our existing distribution chain, especially on the price front. We have tried to control it with strict contracts on pricing and also by restricting the products available online. But the dissonance remains.
Q. One of your biggest competitors, Timberland, has exited the country. And the firm that brought the brand to India said the exit was because of Woodland. Where do you think Timberland faltered?
There could be various reasons: Some may be internal. But it is surprising that they exited as the market is huge and we are witnessing consistent growth of more than 20 percent every year. Any foreign brand entering the country has to choose its partners well. It needs to spend time in understanding the Indian customer. India is not one single market, and in case of shoes and apparels, it differs widely. You can’t sell boots in the South as it is not a major buyer of the product. But it will buy sandals. In one particular season, we stock up only brown shoes in our stores in Bihar and Jharkhand as it is considered an auspicious colour then. Now, these nuances in tastes, colours and habits have to be understood over the years. No foreign brand can understand the market and develop products in a short term; it needs to have patience and perseverance. Moreover, foreign brands sometimes ignore smaller cities where rentals are lower and margins can be higher. In Timberland’s case, there were so many missing factors.
Q. You are adding 40-50 stores every year and have a turnover of nearly Rs 1,300 crore. (Woodland doesn’t share profit figures.) Where does the company go from here?
We want to take the brand global. We have a model that is capable of catering to the needs of the youth in the shoes and apparel segment. We have established a retail presence in Hong Kong, South Africa and Moscow. We want to further build our presence in these countries. CIS [Commonwealth of Independent States] countries are also a good market for our products, more than Western Europe. We have to get a good management team in these countries and open our stores there.
Q. You are a privately-held company. Will you raise funds from the public for your international expansion?
Not immediately. We will fund our expansion through internal accruals. Only if there is a need for massive expansion, we might raise funds from private equity players. But before that, we feel there is an enormous amount of growth still to be realised from India. Over the next five years or more, our domestic revenues will be more than 70 percent of the total [turnover]. This can change but we are not in any kind of hurry. Over a period of time, we will become better marketers and not just good manufacturers. At some point we will outsource more of our manufacturing. But at this stage, having control over the entire supply chain gives us confidence to compete with the best in the world.
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(This story appears in the 06 March, 2015 issue of Forbes India. To visit our Archives, click here.)